The Central Bank's latest report on the economy predicts that the economy will shrink this year and in 2009.

The report cites the continuing housing slump and financial market turbulence.

The bank has also warned against measures designed to prop up the property market, saying there are already considerable tax supports and incentives by international standards.

Meanwhile, a special pre-Budget Cabinet meeting, which had been due to be held on Sunday, is to be held tomorrow instead.

The change was made for scheduling reasons, a Government spokesperson said.

Ministers also held a special Cabinet meeting yesterday evening in the wake of the latest Exchequer figures.